Cost Accounting (Economic Calculus, Khozraschet), an economic category of socialism, a system of relations between society as a whole and its economic units (enterprises, amalgamations), between economic units themselves, as well as within them, concerning the socially necessary expenditure of labour and distribution of the net profit of an enterprise. These relations express the unity of interests of the work collectives and 69 of society (see Economic Interests), ensure the planned organisation of the economy through commodity-money relations, make enterprises materially interested in fulfilling state plans, and stimulate the growth of production and socialist accumulation with minimum labour outlays. Cost-accounting relations express the objective need to ensure maximum efficiency of the process of reproduction at the enterprise level in close unity with social reproduction. Cost-accounting relations are manifested in the socially regulated self-financing of enterprises as they fulfil plans and sell products. Enterprises use the money received from selling their items to cover expenditures on raw and other materials, to replace the fixed production assets used, to remunerate their employees, etc., and obtain excess of returns over outlays, i. e., profit. How great this profit is is determined by total prices of the products sold. Enterprises functioning in the circulation sphere receive as profit part of the value created in material production and in the circulation processes which serve as the continuation of production. On the whole, the size of the profit depends on the value of the actually manufactured and sold products. Much of the surplus product is concentrated in the centralised social funds. Cost-accounting enterprises do not receive the entire value of products they manufacture because part of this goes directly to the state. This procedure of receiving finances ensures the replacement of the outlays in accordance with the socially necessary rates of expenditure of raw and other materials and working time, and is oriented to the social rates of outlays. As these decline, prerequisites are created for the planned lowering of prices. Selling products at value encourages enterprises to cut outlays, to be economical with direct and materialised labour, to increase labour productivity, to introduce new machinery and new forms of labour organisation, and to combat losses in the production and circulation processes. Intraplant calculus plays a big role in the system of cost-accounting relations. In essence, it is a comparison of outlays for a given volume of work with planned rates, and material encouragement of workers for the economised finances. Lenin emphasised that millions can be brought to communism "not directly relying on enthusiasm, but aided by the enthusiasm engendered by the great revolution, and on the basis of personal interest, personal incentive and business principles" (V. I. Lenin, Collected Works, Vol. 33, p. 58). Socialist cost accounting differs in principle from capitalist commercial accounting, based on the exploitation of labour and whose aim is to make maximum profit for the capitalists with minimum capital outlays. The purpose of cost accounting is to ensure a steady growth of social production, and on this basis to comprehensively satisfy the people’s growing material and cultural requirements. The socialist state organises cost accounting, legislatively recording cost-accounting relations in legal and administrative acts and using them in the planned management of the activity of enterprises. Thus, cost accounting is a method of conducting the socialist economy in a planned manner. The main organisational principles of cost accounting are: (1) autonomy of the socialist enterprise, managerial and operational; (2) material incentive and responsibility; (3) monetary control. Enterprises operate on the basis of current and long-term plans (see Current Planning; Long-Term Planning). Cost-accounting relations are connected with the system of indices of the activity of enterprises, which involve production collectives in the aggregate organised labour, appraise their activity, first of all on the basis of the effectiveness and quality of their work, and combine their interests with the interests of society as a whole. Ultimate results here are of special significance. "State enterprises organise their work on the basis of. rates set by central bodies, pay for it, spend the economic incentives funds, deal with questions of material and technical supply, keep finances, etc. Enterprises are legal persons (have bank accounts, are vested with the right to receive credits, conclude economic agreements, draw up an accounting budget). The material interest of 70 enterprises in the results of their economic activity is realised through self- repayment and reimbursement of expenses through their own incomes. The income from sales is the source for reimbursing the enterprise’s expenses, bringing in profit and forming economic incentive funds. For industrial enterprises, the extent of these funds is dependent on the fulfilment of the plan of delivery of listed products in accordance with concluded agreements ( orders) , on raising labour productivity, on improving, the quality of output and on securing higher profits (in certain branches—lowering production costs). The cost-accounting enterprise is fully responsible to society for fulfilling planned assignments and economic agreements, for product quality, for the rational use of resources, for carrying out financial obligations to the state and for observing the law. There are different forms of financial control of cost-accounting enterprises. By establishing the dependence between expenses and profits of an enterprise, society controls the outlays of labour and production resources, the fulfilment of the plan in volume and range of manufactured goods, the raising of labour productivity, improvement of quality, etc. Enterprises also carry out reciprocal financial control, based on the fulfilment of economic agreements in the quality, range and nomenclature of goods and other conditions. Financial and credit bodies make sure that enterprises are well stocked, use materials properly and fulfil their obligations to the financial-credit system in time. At the stage of developed socialism, the role of cost accounting increases. The main aspects of improving economic planning and management directly related to cost accounting are: the consolidation of democratic centralism in economic management, the raising of the scientific level of planning, the orientation of planned activity toward ultimate national economic results (see Final Results of Production Activity); the better use of economic stimuli and levers: profit, prices and bonuses; and the improvement of the organisational structure of management. The principles of cost accounting are used not only at enterprises, but also at higherlevel production units. Today all-Union (republican) industrial associations and also branch ministries operate on a cost-accounting basis. The Soviet state has worked out and is implementing extensive measures to introduce genuine cost accounting in agriculture: purchasing prices are being raised, many collective farms are financed by the state and their considerable debt on State Bank loans has been cancelled.